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Sustainability report assurance in the resources industry

Since the 1980’s, environmental reporting has evolved to incorporate other social issues collectively termed as corporate social responsibility or sustainability reports.  

While there has been fairly extensive research on sustainability reporting (e.g. McGraw & Dabski, 2010; Larrinaga, 2007, CPA Australia 2005; Frost et al, 2005), there have been few studies (e.g. Frost & Martinov-Bennie, 2009; KPMG, 2008; Deegan, 2006) that examined the assurance of sustainability reports.

The production of the Sustainability Report is a step in fulfilling an organisation’s accountability to its internal and external stakeholders, however without the proper internal controls for the underlying information system and assurance of the information contained in the reports, the quality of the information cannot be gauged. Assurance of these reports could ensure transparency, reliability and impartial reporting which balances both the negative as well as the positive impacts of organisational activities.

At the present time, assurance reports in Australia are essentially voluntary, however with the introduction of the National Greenhouse and Energy Reporting Scheme (NGERS) in 2007 and the imposition of carbon tax effective July 2012; the situation has changed for the long term.  

Assurances of sustainability reports are conducted in the absence of a single mandatory framework of assurance. Some guidelines are provided by the International Federation of Accountants (IFAC) Standard ISAE3000 Assurance Engagements Other Than Audits or Reviews of Historical Financial Information (IFAC, 2003) and the Institute of Social and Ethical Accountability’s (AccountAbility) AA100 Assurance Standard (AccountAbility, 2003, 2008). These have been voluntarily adopted by the assurers as the standards are complementary. The task of assurance is also not made easier by the absence of a uniform reporting framework with standards of disclosure/measurement for sustainability reporting.    

The studies on assurance of sustainability reports have examined the trends in assurance of sustainability reports, specifically, incidence of assurance, level of assurance and  the assurance provider, reasons for assurance, methods used and future trends in the assurance engagement (Frost & Martinov-Bennie, 2009, Simnett, 2009; KPMG 2008; Deegan,  2006). These studies have established that there is a growing trend in Sustainability Report assurances, whether by traditional auditors or non-accounting providers.

Research questions

The current study will examine whether there are differences across external assurance providers (auditors vs. non accounting providers) in the following respects:

  • Levels of assurance provided.
  • Scope and purpose of the assurance engagement .
  • Professional standards of assurance adhered to. 
  • Whether consideration is made of internal control and underlying processes for processing information. 
  • Documentation and procedures. 
  • Wording used in the assurance report and the wording of conclusions reached.

Research methods

Data will be collected from various assurance providers’ websites and also the websites of resources companies over the period 2004 to 2011.

The focus will be on resources companies as these rank high in terms of quality of sustainability reporting (CPA Australia 2009); the companies are relatively big and likely to seek assurance on their Sustainability Reports.


Funding body

Faculty of Business and Law, Strategic Research Fund.


October 2012 - March 2014
This project is a sub-project of The requirements of innovative practices in the WA resources sector.

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